Central Maine Power customers can expect their electric rates to go up by 9 percent in March due to the skyrocketing price of natural gas.
The Maine Public Utilities Commission announced Wednesday that it had accepted bids from electric suppliers that will mean a 9 percent increase for Central Maine Power customers and a 10 percent hike for Bangor Hydro-Electric users.
The PUC must approve what is called the standard offer rate from suppliers, which is what most residential and small businesses pay. The last rate increases, which went into effect in March of this year, were even higher – 17 percent for CMP and 14 percent for Bangor Hydro. Rates will be adjusted again in 2007.
That rate includes the price to produce electricity, which is no longer in the hands of CMP and BHE since deregulation took effect in 2000, and the cost of delivery, which local companies do control. The PUC approves bids for the energy supply.
The PUC last year decided to go with a blended rate, breaking its energy supply contract into thirds in hopes that rates would go down this year. They didn’t, but the blended rate helps even out the spikes.
PUC Chairman Kurt Adams warned in October that rates would go up because not only was the price of oil rising, the price of natural gas had doubled in less than a year.
Maine relies on natural gas, as does the rest of the country, to power more than one-third of its electric-generating plants. In Maine’s case, natural gas took up the void left when the nuclear-powered Maine Yankee shut down.
“High natural gas prices, aggravated by the impact of last season’s hurricanes, have driven up market prices for electricity,” Adams said Wednesday.
“Global market conditions for natural gas and oil, as well as disruptions in domestic supply caused by Hurricanes Katrina and Rita, have pushed fossil fuel costs up across the board,” according to a PUC statement released Wednesday. “Because electricity supply in New England is dominated by natural gas and oil, regional market prices have followed the same upward path.”
Maine also is being hurt by the drain on the New England power grid even though the state is a net exporter of electric power.
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